OREANDA-NEWS. AS Tallink Grupp Unaudited Consolidated Interim Report Q1 2016

In the first quarter (1 January - 31 March) of the 2016 financial year AS Tallink Grupp and its subsidiaries (the Group) carried 2.0 million passengers which is 8.9% more compared to the first quarter last year. The Group’s unaudited revenue for the first quarter increased by EUR 2.7 million or 1.4% to the total of EUR 192.8 million. Unaudited EBITDA decreased by EUR 3.2 million or 16.3% to the total of EUR 16.3 million, unaudited net result improved by EUR 1.3 million or 9.9% compared to the same period last year and net loss amounted to EUR 12.0 million.

In the first quarter,which is also the low season, the number of passengers increased in all operated routes. The Group also increased the total revenue mainly from higher on-board sales despite less departures due to maintenance and lower revenue from the chartering activity. Compared to the same period last year the first quarter result was affected by noticeably lower revenues from chartering related to the sale of vessels Regina Baltica and Silja Festival, and termination of cruise ferry Silja Europa charter. However, the Group was able to exceed the reduction of charter revenues with higher revenues from main routes. The first quarter profitability was influenced also by onetime expenses from cruise ferry Silja Europa start of operations on Estonia-Finland route. The fast ferry Superstar sale and charter back transaction will impact the result of the current financial year. As a result of these operational changes, in the first quarter there are lower amortization and finance costs but higher operating costs, which resulted lower EBITDA and improved net result.

The Estonia-Finland routes first quarter revenue increased by 4.1% compared to same period last year. The increase is driven mainly by growth in the passenger number, cargo volume was on level with last year. The cruise ferry Silja Europa started daily operations on Tallinn-Helsinki route cruise service on 13th of March 2016. The Estonia-Finland segment result for the first quarter was lower compared to the same period last year due to the cost of charter of the fast ferry Superstar and also onetime costs related to the preparations of the cruise ferry Silja Europa return to the route.

The Finland-Sweden routes first quarter revenue increased by 5.0% compared to same period last year, the increase is supported by a 6.8% growth in the passenger number. The number of cargo units transported increased by 4.0%.

The Estonia-Sweden route revenue increase of 15.5% was mainly driven by a 13.3% increase of passenger number and higher cargo volume. The Latvia-Sweden route showed slightly higher revenue compared with the first quarter last year.

In the first quarter the Group’s restaurants and shop sales increased by EUR 8.8 million or 8.7%, compared to the same period last year. The sales growth is supported mainly by the higher number of passengers travelling with the Group’s operated ships.

The revenue from the leases of vessels has reduced by EUR 6.8 million or 43.2% in the first quarter due to fewer ships are chartered out, compared to the same period last year.

The Group has continuous focus on improving the public areas and cabins in ships to support the customer satisfaction and revenue growth. In the first quarter, the capital expenditure amounted to total of EUR 12.7 million. Along with the routine maintenance of vessels, number of investments were made to the shops, restaurants and cabins on the cruise ferries Silja Symphony and Silja Europa. On the Tallink Shuttle ferry Star the world’s first floating BURGER KING® restaurant was opened.

In the first quarter of the 2016 financial year the Group’s gross profit amounted to EUR 26.5 million which is on level compared to the same period last year and EBITDA decreased by EUR 3.2 million to the total of EUR 16.3 million. The first quarter profitability was impacted by lower total fuel cost but also higher marketing costs, cost of charter of the fast ferry Superstar and onetime costs related to changes in operations. Onetime costs from operations were related to preparations of the cruise ferry Silja Europa return to the route and launching of the Group operated Tallink Logistics Center.

In the first quarter, the depreciation and amortization cost reduced by EUR 0.8 due to the sale of three vessels in 2015. Total finance costs decreased by EUR 2.3 million mainly due to lower interest cost from regular repayment of loans and also repayment of loans related to sale of ships.

The unaudited net loss for the first quarter of the 2016 financial year was EUR 12.0 million or EUR 0.018 per share compared to the net loss of EUR 13.3 million or EUR 0.020 per share in the same period last year.

Cash flow from operations was EUR 16.7 million in first quarter, which is a EUR 1.0 million lower compared to the same period last year. The total liquidity, cash and unused credit facilities, at the end of the first quarter was EUR 136.3 million (EUR 68.8 million, 31 March 2015) providing a strong financial position for sustainable operations. The Group had EUR 91.7 million (EUR 66.3 million, 31 March 2015) in cash and equivalents and the total of unused credit lines were at EUR 44.6 million (EUR 2.5 million, 31 March 2015).